Cross-Border Energy Access (CBEA) (www.CrossBoundary.com/Energy-Access) will deploy a total of $50 million in capital into its near-term pipeline of solar mini-grid portfolios. The CBEA plans to deploy $150 million to bring clean energy to one million people in Africa. Supports United Nations Sustainable Development Goal number seven (SDG7), affordable and clean energy for all.
Africa’s first project finance facility for mini-grids, CrossBoundary Energy Access (CBEA), has announced $25 million in new funding commitments from ARCH Emerging Markets Partners Limited, Bank of America and Microsoft Climate InnovationFund. This investment will leverage an additional $25 million in senior debt to deploy $50 million of capital into CBEA’s near-term solar mini-grid pipeline.
The CBEA will deploy a total of $150 million over the next two years to bring clean energy to one million people in Africa. Mini-grids combine solar power and batteries to provide 24/7 grid-quality electricity to households and businesses. This initiative will give residential subscribers and small businesses access to renewable electricity for the first time. These solar-powered mini-grids will help bridge the gap by bringing clean electricity to rural areas in Africa that currently lack access to electricity.
According to the International Energy Agency (IEA), the solar mini-grid sector needs $187 billion to achieve universal energy access by 2030. The CBEA estimates that project financing is critical to unlocking the long-term infrastructure-type capital that the mini-grid sector needs. The CBEA was the first to launch its blended project funding structure in 2019 with funding from the Rockefeller Foundation, Ceniarth, DOEN Foundation, Shell Foundation and UK Aid.
According to the IEA, more than 600 million people in Africa do not have access to electricity. This hampers economic growth, productive investment, job creation and poverty reduction. Solar mini-grids provide a solution to this problem, unlocking the potential of those who live without electricity. CBEA’s blended finance approach creates a new model for financing rural electrification in Africa, bringing renewable electricity to one million people once the $150 million target is fully rolled out.
Gabriel Davies, Managing Director and Head of Energy Access at CrossBoundary, says, “CrossBoundary Energy Access has grown with the industry and this fundraiser is a testament to the work of developers, governments and donors over the past few years. The confidence of ARCH, Bank of America and Microsoft reflects the growing maturity of the mini-grid industry and its ability to attract institutional capital. Our investors believe that the mini-grid industry is ready to evolve and that 2022 will mark a turning point in its growth. Work is still needed on all aspects of mini-grids, including regulation, business model and subsidy programs. But we’re excited about the change in scale and pace we’re seeing from developers, investors, regulators and donors, and we’re encouraged by the amount of capital the industry is ready to absorb over the next few years. next 24 months. ”
Humphrey Wireko, Managing Director, CrossBoundary Energy Access, says, “This is a critical step for CrossBoundary Energy Access to unlock the private and public capital needed to scale the mini-grid industry. We look forward to mobilizing this investment to bring our pipeline projects to life and provide power to African homes and businesses through these distributed renewable assets.
Guillaume Barry, Managing Director, ARCH Emerging Markets Partners Limited African Renewable Energy Fund (ARCH ARPF), says, “We believe that distributed renewable energy, including mini-grids, is a critical part of Africa’s energy future, and CrossBoundary Energy Access has developed a thoughtful, blended approach to meet the challenge of unlocking capital for the sector. At ARCH ARPF, we aim to partner with strong management teams and invest in scalable business models that offer compelling alternatives to their clients. We are delighted to support them on a large scale.
Amy Brusiloff, Community Development Manager for Environment, Social and Governance, Bank of America, said, “Through this investment, Bank of America is supporting clean energy solutions in hard-to-reach rural areas of Africa and helping to drive the transition to clean energy for all. This innovative blended finance structure from CrossBoundary Energy Access pools renewable energy mini-grid projects to achieve scale and reduce risk, making it easier for larger institutions to invest.
Brandon Middaugh, Director, Microsoft Climate Innovation Fund, says, “Achieving universal electrification in Africa requires scaling up affordable and clean energy solutions. CrossBoundary Energy Access’ innovative approach to mini-grids unlocks clean energy solutions for the millions of Africans who still lack access to electricity. Microsoft is proud to help scale mini-grid solutions that advance climate equity by bringing clean energy access to more businesses and communities.
ARCH Emerging Markets Partners Limited was advised by Bowmans Kenya. The lenders were advised by Latham & Watkins.
Distributed by APO Group on behalf of CrossBoundary Energy Access.
Cross-border energy access
Global Communications Manager
Telephone: +254 (0)701 380 433
E-mail: [email protected]
About cross-border energy access:
CrossBoundary Energy Access is the premier project financing mechanism for mini-grids, which are small solar storage networks that bring electricity to rural communities. Using blended finance and an innovative project finance structure, CrossBoundary Energy Access unlocks capital for mini-grids with a mission to bring electricity for the first time to over one million people. CrossBoundary Energy Access is a direct investment platform of the CrossBoundary group. https://www.CrossBoundary.com/Energy-Access/
About ARCH Emerging Markets Partners Limited:
Founded in 2018 as a partnership between African Rainbow Capital Proprietary Limited and JCH & Partners LLP, ARCH Emerging Markets Partners Limited is an emerging markets investment advisory firm specializing in private equity opportunities focused on the energy, logistics and natural resources in developing economies. ARCH ARPF is an African renewable energy fund whose mission is to create long-term value for its stakeholders while meeting the growing demand of the African market for electricity generation. The ARCH ARPF team has collectively spent decades building and managing private sector energy investments across Africa, from seed investments to operations, including over $1 billion in successful financial closes. ARCH ARPF, whose investors include institutional investors and DFIs, was partly funded by the European Union. https://www.ARCHEMpartners.com/energy
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